Correlation Between BNY Mellon and FF European
Can any of the company-specific risk be diversified away by investing in both BNY Mellon and FF European at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining BNY Mellon and FF European into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BNY Mellon Global and FF European, you can compare the effects of market volatilities on BNY Mellon and FF European and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in BNY Mellon with a short position of FF European. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNY Mellon and FF European.
Diversification Opportunities for BNY Mellon and FF European
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BNY and FJ2B is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding BNY Mellon Global and FF European in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FF European and BNY Mellon is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on BNY Mellon Global are associated (or correlated) with FF European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FF European has no effect on the direction of BNY Mellon i.e., BNY Mellon and FF European go up and down completely randomly.
Pair Corralation between BNY Mellon and FF European
Assuming the 90 days trading horizon BNY Mellon Global is expected to generate 0.76 times more return on investment than FF European. However, BNY Mellon Global is 1.31 times less risky than FF European. It trades about -0.12 of its potential returns per unit of risk. FF European is currently generating about -0.1 per unit of risk. If you would invest 168.00 in BNY Mellon Global on October 11, 2024 and sell it today you would lose (2.00) from holding BNY Mellon Global or give up 1.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BNY Mellon Global vs. FF European
Performance |
| Timeline |
| BNY Mellon Global |
| FF European |
BNY Mellon and FF European Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNY Mellon and FF European
The main advantage of trading using opposite BNY Mellon and FF European positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNY Mellon position performs unexpectedly, FF European can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in FF European will offset losses from the drop in FF European's long position.| BNY Mellon vs. Azvalor Global Value | BNY Mellon vs. JPM Global Natural | BNY Mellon vs. BGF Global Allocation | BNY Mellon vs. Cobas Global PP |
| FF European vs. Esfera Robotics R | FF European vs. R co Valor F | FF European vs. CM AM Monplus NE | FF European vs. IE00B0H4TS55 |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |